Hotel Insurance

Running a hotel comes with unique risks, from guest injuries to property damage and unexpected legal issues. Hotel insurance helps protect your business by covering costs related to accidents, liability claims, and other disruptions. With the right coverage, you can keep your hotel running smoothly and focus on delivering a great guest experience.

Why Do Hotels Need Insurance?

Running a hotel means dealing with guests, staff, and daily operations, all of which come with risks. Accidents can happen at any time. For example, a guest might trip in the lobby, or a staff member could accidentally damage a guest’s belongings. Without insurance, your hotel could be responsible for paying the costs, which might run into thousands of dollars.

There’s also the risk of property damage from storms, fires, or plumbing issues. If your hotel had to close for repairs, business insurance can help cover lost income and get you back in business faster.

Hotel insurance acts like a safety net. It protects you from costly claims, lawsuits, and unexpected events. It also gives your guests and partners confidence that your business is reliable and professional.

Whether you run a small inn or a large hotel, having the right insurance means you can focus on running your business, knowing you’re covered if something goes wrong.

What Insurance Do Hotels Need?

Managing a hotel comes with a unique set of risks. You are not just responsible for a building. You also look after the safety of every guest and employee. From the front desk to the kitchen, accidents can happen unexpectedly. To keep your business secure, you should review these key types of business insurance policies.

Commercial Property Insurance

Hotels rely heavily on their physical location and appearance. If you own or rent your building, commercial property insurance is vital. It protects the structure itself and the contents inside. This includes furniture, electronics, and inventory. It kicks in during events like fires, theft, vandalism, or severe weather.

Example: A heavy storm damages the roof and ruins furniture in several top-floor suites. This policy pays for the repairs to the building and the replacement of the damaged items inside.

General Liability Insurance

This is often the first policy a business purchases. It protects you against claims made by third parties. This usually means guests or visitors who get hurt or have their property damaged while at your hotel. It covers the costs of legal defense, settlements, and medical bills if you are found liable.

Example: A guest trips over a loose carpet in the hallway and breaks their wrist. They sue for medical costs. General liability insurance helps pay for their medical bills and your legal fees.

Business Interruption Coverage

If a disaster strikes, the physical damage is not the only problem. You also lose money every day your doors are closed. This coverage helps replace lost revenue if a covered event forces you to stop operations temporarily. It can help pay for ongoing fixed costs like rent, taxes, and payroll.

Example: A fire in the kitchen forces the entire hotel to close for three weeks for repairs. Business interruption insurance provides funds to cover the booking income you lose during that time.

Workers’ Compensation Insurance

Your staff keep the hotel running, and their safety is your responsibility. This insurance covers medical costs and lost wages if an employee gets sick or injured while working. In most states, you are required by law to carry this coverage as soon as you hire staff.

Example: A housekeeper strains their back while moving a heavy mattress. Workers’ compensation pays for their doctor visits and physical therapy while they recover.

Liquor Liability Insurance

If your hotel has a bar, restaurant, or offers room service with alcohol, you face specific risks. Standard liability policies usually exclude alcohol-related incidents. This specific coverage protects your business if an intoxicated guest causes property damage or injures someone else.

Example: A patron drinks too much at the hotel bar and starts a fight in the lobby, injuring another guest. Liquor liability coverage helps pay for the resulting legal costs and damages.

Cheapest Hotel Workers’ Compensation Insurance

The cheapest option for Workers’ Compensation insurance is offered by biBerk, with average annual costs around $2,058.

Note: These estimates are based on a small hotel with a limited annual payroll (e.g., $75,000) and a good safety record. Actual premiums will vary significantly based on your state, total payroll, employee job classifications, and your business’s claims history.

Cheapest Hotel General Liability Insurance

The cheapest option for General Liability insurance is offered by Westfield, with policies starting at $806 per year.

Note: These estimates are based on a small, independent hotel with low foot traffic, limited amenities (e.g., no pool, restaurant, or gym), and standard coverage limits ($1M/$2M). Costs will change based on your hotel’s size, exact location, total revenue, and selected policy limits.

Cheapest Hotel Business Owner’s Policy

The cheapest option for a Business Owner’s Policy (BOP) is AmTrust, with average annual premiums around $2,134.

Note: These estimates are based on a small hotel owning its building, with a modest property value (e.g., $500,000) and standard fire protection. BOP premiums combine General Liability and Commercial Property, so actual costs will vary based on your building’s age, construction type, and total insured property value.

How Much Does Hotel Insurance Cost?

Hotel business insurance costs can vary depending on the size of your hotel and the type of coverage you need. Small hotels might pay around $1,500 to $4,000 per year for basic general liability insurance, while larger hotels or those offering more services may pay $5,000 or more each year. The more risks your hotel faces, like serving alcohol, hosting events, or running shuttle services, the more coverage you’ll likely need.

Several things affect the price of your insurance. These include the number of employees, your hotel’s location, whether you’ve had past claims, and what kind of services you offer. Hotels in areas with bad weather or high crime may pay more. Also, adding extra policies like liquor liability, commercial auto, or business interruption insurance can increase your costs but give you better protection.

While it may be tempting to go with the cheapest plan, it’s important to choose insurance that covers your hotel’s biggest risks.

Note: These estimates are based on data for a small hotel business (e.g., limited revenue, small staff, and standard property value). Actual premiums will vary significantly based on your hotel’s specific location, size, total payroll, building value, claims history, coverage limits, and whether you have amenities like a pool, gym, or restaurant.

How Is Your Hotel Insurance Cost Calculated?

Insurance providers analyze the specific risks associated with your hospitality business to set your premium. A modest inn with a small team will typically face lower costs than a sprawling resort with hundreds of workers and amenities like banquet halls or pools.

Geography plays a massive role in this equation. Your specific state and city impact the bottom line. Premiums often go up if your property operates in a region prone to natural disasters or higher crime rates. Furthermore, offering risky services like valet parking, shuttle buses, or alcohol sales will increase your liability and price.

Carriers also look at your track record. A history of prior claims can lead to higher rates. Finally, the total value of your building, inventory, and company vehicles helps determine the final figure.